"Analysts agree that the one force that could clearly nudge oil prices lower next year would be a sharp decline in demand in the U.S. and China."
We could create a sharp decline in oil demand in the U.S. with a phased-in federal tax shift from income to non-renewable energy. When this legislation is enacted, the message will be clear and forceful. Fossil fuels are a 'gift' to be used wisely - not wasted. The impact on energy use and the U.S. mindset will be much more than just saving money. It will also be seen as our OBLIGATION to future generations.
Pardon the over-used phrase....but, there is a great deal of low-hanging fruit. For example, eliminating waste, smaller vehicles, compact fluorescent bulbs, home insulation, walking more and driving less, and businesses recognizing the bottom-line benefit of reducing energy use.
So.....we could enact a phased-in tax shift (how much?) and watch oil prices fall........
The term "lower oil price" needs some explanation. Yes your tax shift, or a GHG tax, or just an increase in the gas tax, would reduce US petroleum demand and thus exert downward pressure on the world oil price.
This would be good for the US trade deficit and bad for Hugo Chavez and Saudi Arabian princes. It would be "bad" in the short run for US drivers and would increase the price of gasoline and other goods in the US, especially those that require large energy inputs and/or transportation over long distance.
But it should stimulate research and investment in energy sources that are either: A. non-petroleum (gas tax), B: non-CO2 emitting (GHG tax), C: renewable (as defined in your tax).
Which would be good "in the long run".
But the examples you give for eliminating waste in you last paragraph would have an impact that is trivial relative to the magnitude of the climate change problem. We will have to think a lot bigger than that if we ever get serious about dealing with climate change. Reply to this
Yes, a phased-in, federal tax shift from income to non-renewable energy "would be 'bad' in the short run for US drivers and would increase the price of gasoline and other goods in the US, especially those that require large energy inputs and/or transportation over long distance." And, as noted in the article, reduced energy consumption in the U.S. could lower world oil prices. At which point, we would need a 'ratchet mechanism' to shift more taxes so that non-renewable energy remains more expensive because we would be recognizing the external costs of our energy sources. Higher non-renewable energy cost will continue to drive conservation and provide the financial incentive for additional renewable energy. Markets will adjust and there will be less "transportation over long distance."
Agree.....it's about "the long run." And, by phasing-in the tax shift.....short-term economic disruptions can be minimized.
The examples I provide < eliminating waste, smaller vehicles, compact fluorescent bulbs, home insulation, walking more and driving less, and businesses recognizing the bottom-line benefit of reducing energy use.> are absolutely NOT trivial.
- eliminating waste trivial?! -- is the amount of energy we waste EVERY DAY 10%?? 40%??? Even if it's only 15%, that's a huge number. - smaller vehicles - let's see, 15 mpg vs. 30 mpg for all those vehicles out there with one or two people in them most of the time. - businesses reducing energy use because they improve their bottom-line......priceless.
(Wasting energy has become a societal norm.)
And, when the U.S. begins leading in reducing greenhouse gases instead of being an obstructionist - think about the impact of this for a minute - our actions WILL have significant global implications.
I think the estimates of energy reduction from increased efficiency are over stated, and way short of what would be needed to deal with the problem of climate change. Sure a "large NUMBER", but a small fraction of the total. Taken together, they would only reduce the rate of increase in GHG emissions.
Cars: double the miles per gallon, but over what time frame? The number of cars is estimated to double each 30 years, and the miles driven per car increased by 12% in the 6 years from 1988-94. Doubling the mileage every 30 years would not even keep up with car-miles driven. And how realistic is the next doubling to 60 mpg? Or the next to 120?
Improved insulation in houses and buildings? During the 1970's most existing houses were "retro-insulated" and new ones built since were built to the new code. 50-60% efficient furnaces were replaced with 90-93% ones. But we are close to the limit to furnace efficiency gains. And indoor air quality suffers when a house has better insulation than most have now, because of exhaled CO2, vapors from cooking, smoking, radon leaks, formaldehyde offgassing from wood products, etc.
Compact florescent light bulbs are touted as huge energy savers based on their lower energy consumption per light emitted. But the story is more complicated. Yes, during times when neither heat or air conditioning is used, that is the case. And in hot weather with AC on, the gains from them are even larger: the added heat from an incandescent bulb makes the AC draw even more energy to maintain the same temperature. But in a northern climate, the gains from the florescent light bulbs are reduced. The “waste heat” they release warms the house and reduces the energy used to maintain temperature. If the house were heated by electricity, there would be no benefit from replacing incandescent bulbs with florescent during the heating season. I estimate that in my Wisconsin house, the AC is run about 1 to 2 weeks a year (bonus time for the florescent bulbs), about 5-6 months of neither heat or AC (expected gain for the florescent bulbs) and 5-6 months of cold enough weather that the incandescent bulbs produce no “waste heat”.
I close with a story I heard some years ago from (I think) New Jersey. The power company wanted to delay construction of a new coal plant for a few years, and new more efficient refrigerators had just come on the market. Someone calculated that if just X% of their customers switched to the new refrigerators, the improved efficiency would reduce power demand enough to delay the need for the new power plant. But the new refrigerators were more expensive than the less efficient ones. But they estimated that given a $Y cash rebate, enough people would buy the new one instead. So they offered the rebate, and as predicted, enough new refrigerators were sold. But the expected reduction in demand did not materialize, instead demand for electricity actually increased faster than projected. Guess why? Reply to this
Per the Intergovernmental Panel on Climate Change, this is what it will take "to avoid the worst effects of global warming." Seems to me that it will take a larger number, but that's the benefit of a phased-in federal tax shift - we can adjust the amount of the shift in real time and keep going if needed.
<Cars: double the miles per gallon, but over what time frame?> Most car owners can double their mpg in a day -- provided they have an incentive going forward. Smaller cars usually cost less so there is likely a windfall involved. It's not about changing mpg averages for vehicle manufacturers. It's about all of us agreeing that non-renewable energy needs to cost more, phasing-in a tax shift, and the market change this will create. Regardless of this "estimate" (<The number of cars is estimated to double each 30 years>, can we as a society afford this? Is this the way we want to use our resources? Can we really do this (if we want) given our resources? What are the external costs - things like the CO2 emitted from all these vehicles; their disposal??
<Homes> When we include the external costs, will we choose to live in such large houses? Can we as a society afford this? Is this the way we want to use our resources? Can we really do this (if we want) given our resources?
<Compact florescent light bulbs> Good information. Can we agree it's roughly a wash - less heat from compact florescent light bulbs in the winter is offset by the reduction in cooling in the summer. Net is then a reduction in electricity to create light.
<Power company story> "Someone" grossly underestimated increasing demand for electricity - regardless of a rebate for refrigerators. NO ONE can exactly predict consumer behavior. It is safe to say however, that at some point increased prices for energy will lower use. So.......let's make our best estimates for how much of a tax shift is best (balancing the need to solve the four biggies with economic considerations such as inflation), enact it, and adjust as needed. In your story I'd say that the "demand for electricity actually increased faster than projected" because a kilowatt-hour of electricity is DIRT CHEAP given what it can do, therefore customers used exorbitant amounts. The electricity would not be so cheap if.........you guessed it......external costs such as greenhouse gas, mercury, and particulate emissions, and the full costs of long-term storage of nuclear waste were included.
As my neighbor Andre said the other day, "We can choose, or have Mother Nature choose for us."
Yes, if the power company had raised their rates rather than rebating the new refrigerators, they would have reduced power use. As to why their rebate scheme failed, they conducted a follow up study to determine the reason.
Answer? Simple. Most of those who used the rebate to buy the more efficient new refrigerator moved their old one to the basement or garage and continued to use it.
"Loopholes" win again. Price is the best regulator. Reply to this
On Compact florescent light bulbs, yes they reduce electric consumption. Especially in hot climates where AC is used most of the time. Their saving is much less in cold climates like Wisconsin. And they have other problems like mercury release when broken or disposed of. There may be better lights available soon, based on diodes.
But we are still building coal power plants when we should be replacing the existing ones. We aren't serious about shutting down existing coal plants because the only way we could currently replace their out-put would be with new nuclear plants. And we still fear another Three Mile Island more than we fear climate change.
And no matter what happens in the US, China now emits more CO2 than the US, with India and others gaining fast. Since we aren't serious about reducing our CO2, why should they be? Reply to this
Some fear another Three Mile Island, but many (myself included) are more concerned with: - how are we going to ensure high-level nuclear waste is transported and stored safely for the (minimum) tens of thousands of year it is dangerous? - how much will this cost? - since we don't have transportation handled nor long-term storage, how can nuclear be an answer to our energy needs? Quoting Mark from Grinning Planet, "It's the generational equivalent of child abuse."
<And no matter what happens in the US, China now emits more CO2 than the US, with India and others gaining fast. Since we aren't serious about reducing our CO2, why should they be?>
Agree 100%. This fact is probably THE leading cause of greenhouse gas emissions. Very sad; selfish leadership.
, can we as a society afford this? Is this the way we want to use our resources? Can we really do this (if we want) given our resources? What are the external costs - things like the CO2 emitted from all these vehicles; their disposal??